Gastrointestinal radiology contrast media developer E-Z-EM said that preliminary results have exceeded net earnings guidance for its fiscal 2007 year-end. The Lake Success, N.Y.-based company said it expects net sales of approximately $137.8 million and net earnings of approximately $0.77 per diluted share.
However, the preliminary net sales figure is approximately $3.2 million lower than previously issued guidance for the year. The firm attributed this to the postponed recognition of revenues resulting from approximately $3.5 million in sales of its RSDL skin decontaminants to the U.S. Department of Defense (DoD).
E-Z-EM said that DoD logistics needs for the transaction required it to temporarily warehouse this product in its own facilities under a separate storage charge and contract.
During the firm’s annual audit, it was determined that under interpretation of the accounting rules governing transactions of this type, revenue from this sale should be recognized when physical delivery to the DoD is made.
E-Z-EM said it currently expects the delivery to occur in its 2008 fiscal year.